i'm julia borsten. all things, dive into media conference where we're getting big news about the future of television. intel announced its big news into web tv the second half of the year. we can expect it to launch live without a table or satellite tv subscription service. this comes as netflix makes another big original content play to secure subscribers. tonight netflix partnering with dream works for its first original kid show based on dream workz movie called turbo this summer. chief content officer tells us he's building on what he calls the success of house of cards big launch to turn netflix into a kids' destination. >> what's interesting about our experience with house of cards, gave us more confidence in our ability to launch an internet content brand. it was the first time we launched our own brand. we feel like we've done it with great success. kids programming is very much

about brands. as we go forward we'll cut our teeth doing this more and more obvious, more frequently. >> now another rival, microsoft, new head of xbox entertainment studios, cbs veteran is here shopping for short and long-term video, ready to spend as much as a tv network, expects profits to be like poft from day one. they are competing against each other as well as traditional distributors like stars, yesterday closed a deal with sony. simon, the biggest winners here are the media companies. more buyers than ever. bab to you. >> history in the making. enjoy the rest of your conference. >> stay tuned. closer and closer to all-time highs. "street signs" starts now. >> stocks on the rise ahead of the state of the union speech tonight. we're probably going to hear a lot about debt stabilization but

we're going to take the politics out of it and show you the real numbers we're facing. is tim cook of apple the worst performer, investors like einhorn growing restless. what apple needs to be. latest round in growing fight between tesla and "new york times." don't worry, america, despite all that, we have got five reasons that everything is fine. who needs kate upton? live from goldman sachs conference scott sits down with him. mandy off today, she'll be back tomorrow. down to the trading floors. mary thompson at the new york stock exchange, rick santelli in chicago. mary, begin with you. >> thank you, five-year highs for dow and s&p 500. russell at an all-time high s&p midcap at an all-time high as well. rally resumes after a pause. let's look at dow leaders in

today's session. financials looking strong reflected in gains in south africa as well as jpmorgan also strength in hewlett-packard and home depot on the back of massco, building materials. on the downside weakness in coca-cola. the company's results, revenue weaker than expected. it expects also to see continued volatility in the global economy. also under pressure today in the dow, cisco reports after the bell tomorrow. let's take a look at the s&p leaders. again, s&p close to a five-year high or trading at a five-year high earlier today. avon products, good results there, company considering strategic alternatives for its money losing jewelry business. massco better than expected results, that's giving a lift to home builders which you see there are moving higher in today's session. right now the dow is 130 points from its all-time high. brian, back to you. >> mary, thank you very much. now let's get to rick santelli.

i want to forget about the bond market and talk about debt. i know you don't like to do that but we will anyway. sarcasm noted. debt stabilization. how important is it for our viewers to get behind the rhetoric and realize that word, stabilization, is a lot different than talking about paying off or shrinking america's debt. >> you know, government now is all about marketing, marketing, tess groups, key phrases, fairness. so you nailed it. stabilization, what does that mean? terminally ill patients can be stabilized. we can stabilize the rate at which the debt is expanding. and i'm being kind there. from cbo estimates, maybe this the first year in four where the deficit is under a trillion dollars, maybe $850 to $900 billion. stabilization, floating in an ocean of debt but still not drowning just really isn't

enough. might work for marketing but i don't know beyond the speech, and these speeches really mostly are pomp and marketing. in the end your cynicism is dull noted. i think whether it's implementation of the new health care programs, they are playing havoc with some of the quickly put together numbers that show a lot more restraint than i believe. >> rick, am i too young or like to believe i'm too young to be cynical, so i guess my point of view is it's all about the language, like you said. stable saig. that's what we're hearing. that seems to be the buzzword but doesn't seem to be solving the problem. >> no. but you know what, the president, i think, would consider a victory trying to create splinters in the fiscal conservative groups. i understand that. but what would be the definition of victory for the population of the united states. victory in that regard is a much different issue than anything in my opinion we're going to hear in a speech. >> all right, rick. thank you very much. let us stay on this topic.

david walker, founder and ceo of comeback america initiative. david, we'll show viewers a chart that really says it all. while the white house can talk about that stabilization of debt, you could see from longer term projections debt is going to be an issue for decades to come. still above historical norms, debt to gdp. are we not at the mercy of borrowers and our fed? >> we are. frankly the only person with an appetite for long-term debt is the federal reserve. china curbed its appetite for our debt. japan has demographic problems worse than us and savings rates going down. we have trillion dollar plus deficits and also have the fed buy our debt. that's a ponzi scheme. that cannot continue long-term. we have to reduce debt as a percentage of the economy and then stabilize it. >> again, i'm sure our viewers, listen, they get tired of talking about it because in some

ways it's a little depressing to talk about this. some people pooh-pooh it. let's take the other side. debt hasn't doomed us now, why should it now. i'm trying very hard to take the other side. >> let's be clear. not all debt is bad. some is fine. too much debt is not. what you have to do whether you're a company, an individual or a country, you have to look at how much debt do you have as a percentage of your income and your ability to service and sustain that. most economists will tell you 60% of public debt to gdp is the right number. international monetary fund will, too. we're 75 now if you count public debt, we're 100% if you count social security and medicare obligations and we're adding debt at record rates. >> david, we're at more than 300% debt to gdp if you factor

in public and private debt, credit card, student loans. >> that's correct. that's correct. if you just look at government, okay? federal, state, local government, if you look at what we owe social security and medicare, bonds backed by full federal government we are only second to greece as far as debt to gdp as far as european countries. we do have a spending problem. we do have a debt problem. we need to get economy going, unmoimt up, deal with the structural drivers of our deficit phased in over time. >> how do we go from kate upton to talking about debt. we need to bring kate upton back. >> i'm all for it. >> me, too. a minder, catch the president live, state of the union address here on cnbc. our coverage begins at 9:00 p.m. eastern. and if you plan on watching and tweeting, be sure to tweet at cnbc politics using #sotu for state of the union. we'll run some on the ticker,

which we call twicker. you're familiar with the motto, everything is fine. our next guess, five reasons you're right, everything is fine. managing director of further lane securities. we just talked about debt and deficits and all the money that our kidd's kids kidd's kids kids are going to owe. let's go through the list. five reasons everything is okay. number one is interesting. s&p finally getting theirs? >> yeah, i think, brian, remember, speaking for years about this issue. in 2008, going through the depths of this crisis looking at the complicit nature of why we got to where we got to. it's safe to bring rating agencies into the discussion an that's what's happened. that will move along and s&p is saying what they need to say in the process. it's good it's coming out now. it's a real end game. >> number two is kind of related. going after the people who took from t.a.r.p. what do you mean by that? >> well, the thing is, you know, i think what we've had to look

at is the government came in. whether you like the way it happened or not like the way it happened, the point is we're at a better place today than we were in 2008. leaner, meaner, et cetera. at this point in time, anyone that has used the system more aggressively, where they have dipped in, where they are having to slap people's hands. it's appropriate. the industry sees that and the market. >> number three, geithner gone. i guess we should frame that, if he's confirmed, is jack good? >> i don't know. plenty of people in the process. the fact is we're no longer in a quote, unquote, siege mentality relative to the partners. remember with geithner et al. pretty close to hitting the reset button at a point in time and they got us through that. what we have to do is take notice and see this next group of folks come in. i think obama's second term is a different mind-set than obama first term. >> we have to leave it there.

we have a packed show. david as always appreciate you coming on "street signs." thank you very much. take care. on deck, is tim cook cooked? apple doesn't turn it around, should a new ceo be on the way? later on goldman sachs ceo blankfein will be here live. certainly a lot to talk about with the man who runs goldman. stick around. back after this. [ woman ] don't forget the yard work!

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big news the past hour on the future of television. jul julia, is it true i'll be on all channels all the time. >> we can only hope. the big news here, intel is getting into the tv business, new division intel media working on a new web tv service which it would deliver over a new set top box with a camera in order to identify viewers it would sell directly to consumers and through retailers. following months of rumors about an intel tv service, its finally talking about its play to offer live tv and also what intel calls catchup tv, the ability to watch on any device, any television or any radio seven days after it airs without prerecording it. this would pose competition for both cable and satellite tv. comcast, time-warner, directv and dish as well as telecom companies, verizon and at&t who

both have web tv offerings. brian, there are a number of questions about intel's service. it hasn't revealed its content partners, it would be licensing a bundle of channels. intel says it's not going after a value play but right now we have no sense of price. there is a lot of talk about how good the user experience would be here and how important it is to access content after the fact. so brian, we will be waiting for more details. sounds like intel is planning to launch this. >> intel that is big news. julia boorstin, thank you very much. meantime apple slide continues today. star of last year, the fifth worst performer in the s&p 500 this year. it's certainly been a rough ride for apple shareholders since ephone 5. why do we say that? look at this time line, august 24th, 2011, tim cook, then

iphone 5, then ipad mini. you can see the iphone 5 announcement was nearly the peak of the stock so far. apple shares down 29% since the iphone 5 launch and down 21% since the ipad mini came out. this begs the question if apple slide continues and new products fail to amaze is tim cook cooked as apple ceo. let us bring in jon fortt, herb greenberg and reggie middleton, editor of the blog, should note reggie but a note out to his clients, i'm not sure the exact price point on ambassadors, dog gone near the top, saying get out of the stock. it was a great call. why did you make it and what do you see happening now? >> two reasons for making it. number one, apple is pretty much done in terms of a fat margin business model simply because the competition from google was designed -- >> you think apple's margins have peaked? they will never be as high as they have been.

>> absolutely never. absolutely never. a lot of people think it's a technology race between apple and google. google used a business model to attack apple not a tech. that's a less than free model which prevents apple from charging extreme margins. apple is not done as a company. they can make better product or drop prices. make better products, r&d expenditures drop margins, drop prices drop margins. either way you look at it, margins are done. >> jon fortt, i know tim cook hasn't been there that long, a year and a half, the stock above where it was when he took over, well above the highs. any rumblings out west about tim cook's future? >> zero. everybody knows tim cook is a ceo, will be for a long time, has delivered what he said he would though not what some people expected. look, on this margins question, what reggie said could perhaps happen. we haven't actually seen any real signs of it. what i mean when i say that, iphone asps have not come down

significantly at all. ipad asps have with ipad mini not because of competition from google. if anything, you could say competition from amazon but apple still dominates tablet market. tim cook dominates here confidently see what happens. he believes margins back up by managing the supply chain and also by the halo effect he expects the mini will create, people buying min issuing as first apple device. he thinks they will buy other higher margin apple devices in the coming month. >> all right. jon fortt is a lot smarter than i am but i'm going to push back on jon just a bit. if the stock price, herb, keeps going down, nobody can say tim cook is going to be the ceo for a long, long time. at some point, the mops, pops, funds, einhorn, will shake the tree. >> depends your definition of a long time.

tim cook isn't going anywhere. other than igger eiger, it's th board. >> jobs' board. >> not known as a board that's overly zealous. he's running what's become a mature company, rapidly becoming mature company. >> i am not being tough on tim cook, right, because the stock is down a long way from its peak and a lot of people got burned if they bought there. my point is tim cook, we'll be fair, his job is hardest in corporate america following the greatest innovator in the history of the world. >> also apple's downside started before he took the reign. it started when jobs was in office. the issue is it's not apparent because there's a significant tell. when the low margin business model came in, apple was still,

from a fundamental perspective, on the engine. they still are fundamentally. they make -- >> anything apple can do productwise or any price point dollarwise that would make you recommend buying the stock? >> there's a price point. apple, as herb said, is becoming a mature company. people are looking at apple as a growth -- >> people are bringing it back and say value play. that's what they said about microsoft, value play. >> here comes jon. jump in here, jon. >> is the problem the market share, or is the problem the margins? you can't have it both ways. >> yes, you can. >> everybody agrees apple is making more money than anybody in smart phones. asps are holding up. they are also making more money than anybody in tablets, even in small tablets. other people are breaking even, maybe making a penny or two. am is outselling them and making margins. at least they think, i don't know, we'll see what happens,

they think they can get the margins up from here. >> okay. well, you can have both margin and market share and that's what apple has. apple is losing market share. the market is growing exponentially. proportion ately it's losing market share. >> they are getting bigger just not as fast -- >> as fast as the market. in addition their margins are shrinking. they shrunk from last quarter. and in addition apple -- a lot of people said research in motion also was making a lot of money, fundamentally they were. bit time the fundamentals show market com preg it's too late. >> this is not tim cook's issue as far as i'm concerned. you don't put the blame on him and say he's cooked at this point. again, this is something that was naturally going to happen. >> we're not saying he's cooked, that's why there was a question mark at the end of the banner. >> and i'm answering it. >> yes, if the stock price keeps going down, if apple has multiple product misses, lots of people are probably cooked but

we haven't seen that yet. >> thank you very much, jon, reggie and herb. now to a story that blew up during this here yesterday. elon must have been watching the show and "new york times" review put out on twitter that the "new york times" review was fake. "times" shot back saying they did everything by the book. now it has everyone wondering. phil lebeau, where do we stand now? >> tesla believes something wrong with the review by "the new york times." they say we stand by what was written by our reporter john broad are. i want to bring in elaine. put out a note yesterday afternoon after this all blew up. elaine you're joining us on the cnbc news line. at the time you actually increased your price target to $45 and think perhaps a little too much might be made about this entire range-gate, if you will. tell us why.

>> thanks for having me on the show. reading the articles immediately raised red flags for me. you could see from the reporter's travel log there were a couple of things that didn't quite go correctly. at first didn't plug in overnight stop when the battery was low. you know what happens when you don't plug in your phone before the next day. you're pretty much done by the time breakfast is over. secondly he also didn't charge the car fully before driving it for over five hours. i don't know about you but i can't recall driving five hours without having to stop for gas or at least bathroom break. pretty apparent the whole story wasn't there. many customers responded on the blogs to point out the mistakes from the reporter as well. >> elaine -- sorry, phil. >> go ahead. >> elaine, are you surprised at the market's reaction to the "new york times" story? it was an automotive story section in the "times." i love cars, picked up on it, all of a sudden it's blown up. are you surprised by the reaction? >> the company and stock has

been fairly controversial. the "times" article was, unfortunately rather sensationalistic and misleading in terms of making it appear the issue was with the car and the technology. we expect that tesla will be coming out very soon with a lot of additional details to confirm the car did perform the way it was designed, flawlessly and a case of not following instructions. so the times obviously has a huge readership and has picked up many different outlets. >> all right, elaine and phil, got to leave it there, a tight show. thank you both very much. up next, we debate the reason that linked in is crushing the stock market. first, more kate upton. why not? there's something on the teleprompter but i can't read it. back after this. tdd#: 1-800-345-2550 when i'm trading, i'm so into it,

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decrease in value instead recommending the funds carry a 3% capital buffer to absorb any potential losses, also recommending value of money market fund shares are in realtime or float instead of quoted at a dollar. remember, this has been in the crosshairs in washington. one of the proposals a former s.e.c. chair got held up with commissioner aguilar to put out proposals for a review of this reform. $2.7 trillion industry, brian, so if it gets reformed it's doing to be an incredibly big deal and close space to watch. >> kayla, thank you very much. meantime cnbc newsroom buzzing from last hour. ladies and gentlemen, two-time swimsuit model kate upton has left the building sadly. but the story isn't over. this next story could be one of the greatest marketing plays of all time. while supermodel status reserved for a few, one retailer hoping women will pick up featured items to look a little more like

kate upton. cortney reagan in target in jersey city to explain. cortney. i'm having trouble getting through the segments. i'm not focused. >> sounds like you guys are having a really good day there. i'm missing a lot on the street. i'm here at a target in jersey city. "sports illustrated" swimsuit edition is an institution, not just among men. 18 million women are expected to flip through the pages of the magazine this year maybe hoping to look a little more like kate upton. target is hoping they can put that pipe dream a little within reach. this year for the first time "sports illustrated" has chosen a target brand exhilarations bikini to be worn by jessica perez. you can see her in this photo shoot. she was modeling this in chile. the company didn't buy this placement. it's marketing the company can only dream of. the picture may be worth a

thousand words but the bikini sells for $30. target did invest in the issue. there's an insert inside the edition called secrets of swimsuit, mini zine, six pages of si content, six pages of target advertising that goes hand in hand helping us perfect that kate upton look complete with the makeup and beach hair to boot. target sponsored si swimsuit video digitals, you'll see that on different platforms as well as target stores. vice president of marketing say the feature swim suits will be available at the end of the week, some are available. they don't expect inventory to be a problem like the missoni launch. should the need for more inventory arise, they can do so. some bathing suits tagged with a blue teardrop that let's you know this is one of the suits seen in "sports illustrated"

just in case you forget. back to you. >> courtney, thank you very much. somebody at target needs a promotion and pay raise, dog gone it. that's me. up next on sunshine. we got nothing to top kate upton, nothing. we can give awe look at why linkedin may be the new facebook. and counting down -- who needs kate upton when we've got lloyd blankfein after this.

two down grades for facebook, bernstein cutting ratings say upside is priced into the stock. rich greenfield also downgrading this time to a sell, a $22 target. he says ad revenues will grow, expectations have already risen. that leads us to linked in. that stock up 34% this year. users spending more and more time on the site.

let's go inside. the big move with principle analyst at redesign mobile as well as our own herb greenberg. i want to start with you, you were excited and aflutter because you had written a piece, one of your excellent pieces. you said, everybody is engaged on linkedin. you don't mean in a match.com. >> when you write on linkedin, part of the influence, write on apple, i get 80,000 hits and 400 comments. those aren't the typical, you don't like it. >> real people. >> serious people with seriously thoughtful comments, 400 or 500 or 300 depending what you're writing about. you say there's something going on here. it's the demographics they are going after, a much higher level of demographic. >> what do you make of this? i'm starting to get e-mails through linkedin. it seems to me an eecdotally.

>> you went to a certain place, now more like a coffee shop or lounge where you hang out. they are getting people to come back on a regular basis, which was a big concern with this company. talking to folks earlier today, year over year their time on site is up 23% to 23 minutes a month, which is pretty phenomenal increase. nowhere near facebook levels but you're doing different things there. >> that's good. it's up. 23 minutes a month still does not seem like a lot of time for user engagement. >> it's not a lot of time for engagement but it's about what you're doing. google has relatively low engagement. what you're doing is looking for product, so it's highly monetizable versus what you're doing on facebook looking at vacation pictures or baby pictures. that's not a highly monetizable activity. >> rocky, isn't linkedin, i think i read an article where

linkedin would admit this, too. isn't this a sales organization than a sales media organization, because their big business is selling for thousands of dollars a year and a subscription access to recruiters to find you and herb? >> absolutely. that's their current business but they have tremendous opportunity to help professionals become better professionals. that's part of what the linkedin product herb's product is doing, helping me become a better professional and hopefully earn more over my lifetime. if they can develop products around that to help me make more money, that's something people for. >> herb, where do you think linkedin goes. listen, i worry about evaluations, earnings growth, i worry about the size of the market. they have got a lot of people on linkedin. the stock is trading at a hefty evaluation. >> it's their to lose. they have been able to show they go from one point where people thought it was a jobs board. actually, look, i've been paying

for linkedin for several years because it's a great electronic resource as a journalist. there are things i can do with it. they have to keep me engaged, others engaged. the risk is does someone come out and do to them what they did to monster worldwide. >> we have to go but quickly is facebook a threat to linkedin on the professional side? they are getting more into that? >> i don't think so. not in the next three to five years, too focused on the consumer side. >> rocky, herb, thank you. and i will thank you on linkedin. the head of the cia calls it the single biggest threat against america now. what it is and the men working around the clock to stop it. minutes away from lloyd blankfein on cnbc but first what's coming up on closing bell. >> at the top of the hour, could president obama's state of the union spark the next leg of this round? we have both sides of that debate coming up.

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>> cyber is now at a point where the technology is there to cripple the country, to take down our power grid system, to take down or government systems, take down or financial systems and literally paralyze the country. that is a reality. >> secretary of defense leon panetta issuing a warning about

cyber crime and hacking. the president is expected to release an executive order to try to increase defenses against cyber attack. who is in charge of keeping us safe from this growing threat. mike, how severe an issue is this? >> i was pleased to hear secretary panetta make remarks. i fully agree with him. i made similar remarks to candidate obama when we were doing briefings to the candidates back in 2008. it was a problem then. it's becoming more severe. so it's something we're going to have to deal with as a nation. >> how big of a problem is it that one of our big trading partners, china is alleged to be involved in a lot of this? >> china has a policy of economic espionage, therefore they are penetrating information systems across government, across the private sector, aerospace, software companies,

virtually any company that is generating research development, business plans, a path for going forward. they are targeting that information, being successful in extracting at the tera byte level. >> we want to sell them pizzas and buy their cheap socks. what do you do about it? how do you go after china on that? >> that's the challenge. this has been a problem for a long time and a growing problem. it becomes the political issue of how do you deal with china when they are conducting this inappropriate activity when they are, in fact, one of our largest trading partners. that issue, while complex, must be dealt with. i believe, based on the signs i'm seeing from the administration, they have plans to increase the level of dialogue, if not perhaps confrontation, on this issue. here is the issue from my point

of view. left uncheck taking capital out of the country over an extended period of time takes away our competitive advantage. so if we're going to be a player, we have to do what we've always done, which is by the generator of intellectual capital and new ideas. >> well side. mike mcconnell, former director of national intelligence. thanks so much. an important issue. heading to the goldman sachs technology conference. guess who is there? the ceo of goldman sachs. first on cnn with scott wapner, you won't want to miss that. stick around. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim.

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all right. the dow about 100 points away from its all-time high. can you see four stocks down on the dow. unitedhealth, pfizer, cisco and coen. don't forget ceo goldman sachs, lloyd blankfein is your guest right after this break, live from the goldman sachs technology conference. how did he get in? we're back after this. it's delicious. so now we've turned her toffee into a business. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. i never really thought i would make money doing what i love.

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tdd#: 1-800-345-2550 investors should carefully consider tdd#: 1-800-345-2550 information contained in the prospectus, tdd#: 1-800-345-2550 including investment objectives, risks, tdd#: 1-800-345-2550 charges, and expenses. tdd#: 1-800-345-2550 you can request a prospectus by calling schwab tdd#: 1-800-345-2550 at 800-435-4000. tdd#: 1-800-345-2550 please read the prospectus carefully before investing. somehow scott wapner was here in new jersey yesterday and today he's out west. it's incredible. let's get out to the goldman sachs tech conference and scott wapner with a special guest. >> all right, brian. thanks so much. our special guest, goldman sachs ceo lloyd here. thanks for having us. >> thanks, scott. >> looking at all the ways technology influences our world. goldman has a pretty big technology footprint. people focus own as a bank but you might as well be considered a tech company as well.

>> people think of technology as an industry, but technology obviously drives all industries, and so in something like ourselves where we have payments and have to analyze material, do a lot of processes, we really have very big investment in technology. let me just give you a statistic. almost 30% of the employees of goldman sachs are in the technology area. >> and i don't think people would realize that, first off, and they certainly don't focus on it. your cfo made some comments early today at another conference where he said technology is the way to compliance and risk management in sort of this new world that we live in. >> sure. technology involves everybody familiar with the distribution of information, but we have to have information ourselves, and in a world where everybody is focused on how you're using your capital, how are you using liquidity and what you have and to make yourself safer, we have to take these principles and concepts that we understood on a gross level and in order to use things efficiently, we have to

transfer it down to the lesk level and in many cases to the trader level himself and so we have to use technology so that if somebody is going to buy a security or a commodity, he or she has to know the real consequence of owning that in terms of how much capital is being used, how much liquidity is being used. >> how much of your being here has to do with trying to grow your investment banking business specifically in the area of technology? i mean, let's face it. you trail a large number of your competitors. >> is that right? >> you do. >> i thought we were -- no. you'll have to show me that. i think we have had for quite some time a -- the major franchise in technology, investment banking and i think, frankly, it's -- it has been a signature of the firm, and it's been very important part of the corporate activity in the world. don't forget. this is the technology, the center of innovation as an industry, but it also drives innovation and other industries. >> let's say investment banks

who are representing acquirers in various deals, at least from the list that i saw. i'm sure you want to be higher up than you are right now, and this helps, doesn't it, by being here? >> sure. now, it tends to be when you're in investment banking like ourselves, we tend to represent people who are selling their businesses more than people who are acquiring their businesses more than that, and then generally that's in the m & a business, generally where you'd like to position yourselves because a buyer competes with other buyers to buy a company, but seller always sells. >> okay. so i'm glad we've made that distinction. what about overall m & a? at davos when you spoke with us last, you said that it -- it wasn't where you thought it should be given the environment we're currently in? >> yeah. should it be beyond my pay grade who things should be, but what my expectations should be, we analyze statistics like you audience statistics and your audience share and all different

ways depending on different kinds of market conditions. for where we are in the economic cycle given the level also of interest rates, which are very, very low and equity market values which are high and moving higher, we think there should be more activity now generally than we're seeing in the case now, but by the way, you can either search for the reason why, or you could decide that that's just around the corner. personally i think the markets will catch up to itself. the conditions are really there, and i know that there's been a lot of uncertainty swirling around where people aren't sure what the value of things are. the most common thing we hear is these people were talking, but they couldn't agree on valuation, so at a period in time when there's uncertainty about tax rates, what growth is going to be, whether there's going to be headwinds because of austerity measures that are being adopted and trying to close the budget and all these kinds of things, disagreement on valuation in the immediate future, but as that gets cleared

up, even if you don't like the answer, it's going to result in more activity. >> are you optimistic that it's going to get cleaned up? i mean, we had the whole fiscal cliff debacle real i think it's fair to say and the embarrassment around that, and now we're dealing with the looming sequester, so corporate america, it seems, wouldn't have much more reason to be optimistic than they did 30, 60, 90 days ago. >> listen, i think one could be, and i am, critical about the proce process. it doesn't have to work like this, be as messy and noisy and kay oddic and we don't have to go. think of the metaphor of a cliff, we don't have to live life on the edge of a cliff. that being said, there's a lot of budget deficit reduction that's already happened, and people don't realize that either. at the end of the day between tax expenditures, expenditures that have been cut and revenue that's been raised, that's about $1.5 trillion with the fiscal cliff -- with the sequestration money, that's going to take it

to something like 2.6 trillion or maybe even a little bit higher. it wouldn't necessarily be the way i would do it, and it wouldn't be done all at once, and it wouldn't be done in this timetable because that's going to have some consequence to the economy. that being said, it is getting done, and even if sequestration gets pushed off, it can only get pushed off by putting other deficit reduction measures in its place, so when you look through, it come hell or high water, we're going to have done 2.6 trillion of the original offer of $4 trillion. that's not where we should be, but that's not nothing. >> president is going to deliver the state of the union address this evening. i'm sure you'll be paying close attention to that. in your mind, what is the state of the union right now? what's the state of the economy? this is probably i think your first chance, at least on our network, to react publicly to what as a dismal gdp report despite there's data out there that suggests it could be revised upward. however you sliced it, it didn't

look good. >> look, a lot of things to worry about. let me just rank it. things to worry about the economy, but i think the -- the body -- the divided country -- we could talk about the divided government, but the divided government is a bit reflective of the fact that the country is divided. the political environment is very, very difficult. the economic underpinnings that we're facing now in the environment that we're going to have to deal, you know, for the economy, is actually better than it's been in some time. we've chewed through a lot of problems. a lot of the leverage on the banking side, on the corporate side and on the individual side has been chewed through. housing has probably in all likelihood has turned around at this point. the energy situation in the united states is terrific, and beyond the contemplation of anybody who grew up when i grew up sort of secure in the knowledge that the u.s. is going to have to import energy forever, and that may not

necessarily be the case. so those are all tailwinds. the big problem is getting the country to receive that bounty and to plan for it and to structure itself in the right way. if you take energy, for example, we really have implemented an energy policy that will be able to take advantage of some of those blessings that have come our way. >> what do you make of the stock market, the fact that here we are at the fresh highs, literally made today that were less than 1% from all-time highs on the dow jones industrial average, despite the fact that there is a lot of noise out there. >> there always is a lot of noise. could i think of a million things that could go wrong and what people underestimate or underassess is that things could also go right. there's a lot of things going right, and the equity market may well have it right. look, interest rates are very low. now you may argue in hindsight, you know, a year from now that they were kept too low for too long and i understand why that's being done. no onets